Full steam ahead: SSGC board clears LNG retrofit terminal project

ECC to give final approval, terminal will handle 500mmcfd of gas.


Zafar Bhutta September 21, 2013
The project will be completed in 22 months at an estimated cost of $163m. The qualified bidder has quoted 80 cents as tolling tariff. PHOTO: FILE

ISLAMABAD:


The board of directors of Sui Southern Gas Company (SSGC) has given the go-ahead to the liquefied natural gas (LNG) retrofit terminal project for handling import of 500 million cubic feet per day (mmcfd) and has asked the government to also approve the facility.


The green signal came after the government asked the SSGC board to clear the way for the LNG retrofit terminal – a unique project which enjoyed no government guarantee, say sources.

A member of the board, which met on Thursday, raised some objections to the project which the board overrode with a majority vote and then asked the federal government to push ahead with the plan.



SSGC also sought legal opinion from experts who clarified that the project structure was in line with Public Procurement Regulatory Authority rules.

When approached, the SSGC spokesman confirmed that the board had agreed to press on with the LNG retrofit project, but gave
no further details.

According to a senior government official, the new government has approached Qatar to clinch an LNG import deal on a government-to-government basis. However, Qatar is seeking a commitment from Pakistan to establish an LNG terminal before entering into any import contract.

“Now, the LNG retrofit project will be tabled before the Economic Coordination Committee (ECC) of cabinet to get formal and final approval for award of contract to the qualified bidder, which will establish the LNG handling facility at Progas terminal owned by SSGC,” the official added.

Talking to The Express Tribune, Petroleum Secretary Abid Saeed said they had not yet formally received the decision taken by the SSGC board, but added the ministry would take it up in an ECC meeting for approval.

The SSGC board also recommended that the price offered for the terminal looked competitive and the government should go ahead with the project.

The project will be completed in 22 months at an estimated cost of $163 million. The qualified bidder has quoted 80 cents as tolling tariff.

In India, LNG tolling price ranges from $0.605 for 1,400 throughput to $1.106 per million British thermal units (mmbtu) for land terminals. In Indonesia, tolling price is $1.8 per mmbtu for handling LNG at a floating terminal and $1.2 per mmbtu for land terminal.

Average tolling price based on the year 2010 was $0.73 in the US and Canada, $0.87 in China, $0.81 in Europe, $0.89 in South Korea and Japan, $0.72 in the Middle East and $0.71 in Southeast Asia.

Technical proposals for the project were received on February 16, 2012 in stage-1 and out of five proposals, three were short-listed for stage-2 which included 4GasAsia LLC, Global Maritime USA and Granada Group of Companies USA.

Request for Proposal (RFP) with revised requirements was issued to the shortlisted bidders on October 31, 2012 inviting technical and financial proposals in stage-2. Two proposals – one each from 4GasAsia and Granada – were received on December 21, 2012 and only 4GasAsia was found technically compliant.

Published in The Express Tribune, September 22nd, 2013.

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COMMENTS (3)

antanu | 8 years ago | Reply

@Observer: for biased mind every thing related to pakistan is dubious....why are you trying to make yourself a laughing stock by making nonsensical comments.

Observer | 8 years ago | Reply

4GasAsia LLC is probably a scam company. Its website looks very suspicious.

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